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X 


BEFORE THE UNITED STATES ANTHRACITE 
COAL COMMISSION 


EMPLOYES EXHIBIT NUMBER- 



The Relations Between Wages and Pro¬ 
duction, Costs, Prices, and Profits in 
the Anthracite Mining Industry 


Presented by 

W. JETT LAUCK 

On behalf of 

John L. Lewis, President 
Philip Murray, Vice-President 
F. P. Hanaway, International Representative 
Percy Tetlow, Statistician 


John Dempsey 
Thomas Kennedy 
Chris. J. Golden 



Of the 


United Mine Workers of America 


WASHINGTON 

1920 


to 




s exh2bk W;!S prepared under the 
supervision of 
w. JETT LAUCK 
Arthur S 

* of 

rtOU 2*t 



BEFORE THE UNITED STATES ANTHRACITE 
COAL COMMISSION 


EMPLOYEES EXHIBIT NUMBER, 


The Relations Between Wages and Pro¬ 
duction, Costs, Prices and Profits in 
the Anthracite Mining Industry 


Presented by 

W. JETT LAUCK 


On behalf of 


United Mine Workers of America 


I0A 


WASHINGTON 

1920 


Q *v\ 


l. 














► 






•* 











INTRODUCTION 


In considering the proper wage rates to be fixed for the ensuing 
year in the anthracite coal mining industry, it is advisable to have 
in evidence the relationship that has heretofore existed between 
these wage rates and the production, costs, prices and profits of 
the industry. In this exhibit we have attempted to show what 
those relationships have been, and the bearing they have upon the 
fixation of wages. Most of the information contained herein is 
familiar to anyone fully acquainted with the anthracite industry. 
The facts are published by the United States Geological Survey, 
Department of the Interior, in its annual report on the Mineral 
Resources of the United States, and in other authentic publica¬ 
tions. Much of the data upon costs is from the report made by 
the United States Federal Trade Commission upon Anthracite 
Coal, while the price data is in general taken from the reports 
of the United States Bureau of Labor Statistics. 

We have grouped the data contained herein under the following 
heads: 

A. Production and Days Worked. 

B. Production and Wage Rates. 

C. Wage Rates and Costs and Prices. 

At the start of each group, we summarize the information 
tabulated and charted, and state the deductions that we make 
therefrom. 

Very briefly summarized, this exhibit shows that the probable 
opportunity to work in the future cannot be measured by the 
amount of time the mines were open in 1917,1918 and in 1919 as, 
partly owing to a return to normal of the number of employees, 
the probable number of days worked in the future will be lower 
than was the case in any of these years. The obvious deduction, 
of course, is that the fixation of the wage rates should take this 
into account, a higher rate being necessary than would be proper 
if the same opportunity to work were to be offered in the future 
as in the past. 

The exhibit shows also that the wage rates in the past have not 
kept pace with the value of the goods produced, and finally that 
the increases in prices have been far higher than the increases 
in labor costs at the mine. 




/ 




A.—PRODUCTION AND DAYS WORKED 


The following charts, numbered A-l to A-5, inclusive, show 
how the production of anthracite coal has varied from year to 
year in connection with variations that took place simultaneously 
in the total number of employees at the mines and in the average 
number of days per year that the mines were worked. 

There has been little change in the amount of coal produced per 
year since 1909, the maximum variation except for the abnormal 
years 1917-1918 .being from a minimum of 81,000.000 to a maxi¬ 
mum of 91,000,000 short tons, a variation of about 12 per cent. 
Still excluding the two abnormal years, the average production 
per year for this period 1909-1919 has been 87,300,000 short tons, 
which is slightly in excess of the production during the year 1919 
(i. e. 86,200,000 tons). 

In the numbers of employees, on the other hand, there has been 
considerable fluctuation, and frequently when the production has 
risen the number of employees has at the same time decreased, 
and vice-versa. Thus in order to obtain the required production 
of coal, it has been necessary to work the mines a number of days 
that varies from year to year, this being one of the causes of the 
great irregularity of employment that exists and always has 
existed in the anthracite coal mining industry. 

The following table of “days worked per year since 1890” is of 
interest: 


1890 . 

1891 . 

1892 . 

Average for period 


Days worked per year 

. 200 

. 203 

. 198 

. 200.3 


1893 . 

1894 . 

1895 . 

1896 . 

1897 . 

Average for period 


197 

190 

196 

174 

150 


181.4 


1898 .. 

1899 .. 

1900 . 

1901 . 

1902 . 

Average for period 


152 

173 

166 

196 

116 


160.6 


















207.2 


1903 . 206 

1904 . 200 

1905 . 215 

1906 . 195 

1907 . 220 

Average for period. 

1908 . 200 

1909 . 

1910 . 229 

1911 . 246 

1912 . 231 

1913 . 257 

Average for period. 232.6 

1914 . 245 

1915 . 230 

1916 ... 253 

1917 . 285 

1918 . 293 

Average for period.261.2 


1919 (estimated) 


252 


Thus the greatest average number of days worked during any 
of the five-year periods, except the war period 1914-1918, is 232.6 
days per year, which average covers the period from 1908 to 1913, 
inclusive. 

With the start of the European war in 1914 many of the em¬ 
ployees began to leave the anthracite industry, either drifting 
into the more highly paid industrial occupations or enlisting with 
the European forces. This reduction in the number of employees 
became much more pronounced when the United States entered 
the war, as is seen by the following table: 


Year. Number of Employees. 

1909 . 173,504 

1910 . 169,497 

1911 . 172,585 

1912 . 174,030 

1913 . 175,745 

1914 . 179,679 

1915 . 176,552 

1916 . 159,869 

1917 .. 154,174 

1918 . 147,121 

1919 . 152,296 


After the armistice the employees have been slowly returning 
to the industry, and there is every reason to believe that the pre¬ 
war number of employees will eventually be found once again 

































7 


upon the payrolls, provided there is no deterrent factor such as 
inadequate wage rates in comparison with price levels. This will 
of course mean that with a fairly constant production the number 
of days worked will approximate the average of the pre-war 
years. 

That the production will remain fairly constant in the future 
seems evident. There will be a normal increase from year to 
year caused by the normal growth in population, but, on the other 
hand, this is somewhat balanced by the fact that the domestic 
market in the west is once more open to bituminous competition 
and by the fact that the concentration of our population in apart¬ 
ment houses opens a market for bituminous coal in places where 
formerly only anthracite was burned. 

On the other hand, it is to be expected that as the mines grow 
older more labor will be required. The following is from 
Saward’s 1918 Coal Trade Annual: 


With longer haulage-ways there are more locomotives and more 
mules required to handle a given amount of tonnage, therefore more 
drivers are required and a larger force is necessary to keep up the 
roadways, including not only repairs of track but protection of 
roof. As mines get deeper there is more pumping required. While 
this can be handled to a certain extent by the installation of larger 
pumps, after a time it becomes necessary to have more pump 
runners. 


It is by no means safe, therefore, to base predictions as to 
earning power in the future upon the earning power during the 
past few years when the numbers of employees were considerably 
below the normal, and when the consequent number of days 
worked per year were proportionately above the normal. In 
other words, with a return of the normal number of employees, 
and the table shows that such a return has already begun, there 
will necessarily be such a falling off in the number of days worked 
per year that the earning power of the employees will be decreased 
below the 1919 earning power, unless there is such an increase in 
the wage rates as will counteract the falling off in days worked. 

It is thus evident that one of the factors vitally affecting pro¬ 
duction (or, assuming a given production, inextricably bound up 
therewith) is the number of employee-days—that is the number 
of employees multiplied by the average number of days worked. 
The following table gives the production and the employee-days 
per year in the anthracite industry since 1910, both in actual 
amount and in relative per cent, of the 1910 figure. 


8 


PRODUCTION AND EMPLOYEE-DAYS 



Production in 

Employee- 

Relative 

Relative 

Employee- 


Short Tons 

Days 

Production 

Days 


000 omitted 

000 omitted 

1910=100.0 

1910=100.0 

1910. 

. 84,485 

38,800 

100. 

100. 

1911. 

. 90,464 

42,300 

107. 

109. 

1912. 

. 84,361 

40,200 

100. 

103. 

1913. 

. 91,524 

45,100 

108. 

116. 

1914. 

. 90,821 

44,000 

107. 

113. 

1915. 

. 88,995 

40,600 

105. 

105. 

1916. 

. 87,578 

40,400 

104. 

104. 

1917. 

. 99,611 

44,000 

118. 

113. 

1918. 

. 98,826 

43,100 

117. 

111. 

1919. 

. 86,200 

38,400 

102. 

99. 


There has been some question as to the actual average number 
of days worked during the year 1919. The tables presented here 
are based upon an average of 252 days worked, as it seems certain 
that the correct number will fall somewhere between 252 and 260 
(see our exhibit on Irregularity of Employment) with the prob¬ 
ability of the lower figure. It has been suggested that a more 
nearly correct estimate would be 273 days. Of course it is well 
known that the actual figure is at present not available, and may 
possibly never be available, but the above table bears out the 
approximate correctness of the estimate used in this exhibit. 
Since 1915 the relative of the days worked has been either the 
same as the relative of the production, or else has been slightly 
below it. That is another way of stating that in recent years the 
output of coal per man per day has been higher than the output 
that formerly existed. If the estimate of 273 days worked in 
1919 were substituted for 252 days, this would be reversed for 
that particular year, the relative for 1919 then becoming 107, 
which is five points above the production relative instead of three 
points below it. 

Graphically this fact is shown on chart A-5, which compares 
side by side the production and the number of employee days 
year by year. A glance at this chart reveals at once that the one 
quantity follows the other; where one goes up, the other goes up, 
and in substantially the same degree. The estimate of 273 days 
worked if applied to this chart would destroy in 1919 the simi¬ 
larity that exists between the two curves and that has existed 
throughout the entire period included in the chart. Moreover, 
the report of the Lehigh Coal and Navigation Company for 
1919—the only report of the Coal Companies at present avail¬ 
able—indicates a very great decline in the number of days 
worked in 1919, compared with 1918. This is brought out in the 












9 


following table (taken from that report, page 7), showing the 
number of hours the breakers of the several collieries of the 
company were in operation in the two years. 

1919 1918 


Working Commercial Production Working Commercial Production 
BREAKERS Time For Year Per Hour Time For Year Per Hour 

Hours Tons Tons Hours Tons Tons 

Nesquehoning. 2,232% 811,965-11 363-14 2,373% 939,570-15 395-16 

Lansford. 2,119% 764,122-08 360-10 2,377% 881,562-14 370-15 

Coaldale. 2,196 811,204-02 369-08 2,412% 913,919-16 378-16 

Greenwood. 2,162% 352,849-14 163-04 2,285% 422,466-15 184-17 

Rahn. 2,117 426,518-13 201-09 2,362 455,855-17 193-00 

Tamaqua. 2,185% 389,779-10 178-06 2,389% 400,685-08 167-13 

Hauto Washery. 1,735 202,011-08 116-09 4,328% 407,148-15 94-01 

Ashton Washery. 1,265 117,622-05 93-00 2,462 307,870-18 125-01 


Total . 16,013 3.876,073-11 1,846-00 20,991% 4,729,080-18 1,909-19 


As stated above, the relation between production and employee 
days may be represented by the number of tons produced per 
man per day. This is shown in the following table: 


Average tonnage 

Year. per man per day 

short tons. 

1907 . 2.33 

1908 . 2.39 

1909 . 

1910 .2.17 

1911 .2.13 

1912 .2.10 

1913 .2.02 

1914 .2.06 

1915 .2.19 

1916 .2.16 

1917 .2.27 

1918 .2.29 

1919 .2.25 


In the above table, the estimate of 252 days worked during the 
year 1919 produces a figure in obvious agreement with the rest 
of the table. There was an evident speeding up of the individual 
man during the years 1917-1918 when the war necessity spurred 
him on to produce his utmost, and this speed has slackened some¬ 
what during 1919, but not very much. 

On the other hand, if the estimate of 273 days worked in 1919 
is used instead of 252 days, the resulting production tonnage per 
man per day is reduced from the figure of 2.25 to 2.08, a lower 
figure than has existed since the year 1914, a figure that is much 
lower than the average of the table, and a figure that is unthink¬ 
able in the light of what has actually taken place. 


10B 





























10 


The following chart, A-l, shows the production of anthracite 
coal in net tons since 1909, the value per ton, and the total value 
of the product. The figures are from the reports of the United 
States Geological Survey, the 1919 figure for production being 
estimated by the Survey. 

The number of tons produced did not vary materially from year 
to year except for the increase in the abnormal years 1917 and 
1918. In 1919 the production fell off to the lowest point since 
1912. 

The value of the product, however, has risen almost uninter¬ 
ruptedly since 1909, the rise since 1915 being very marked. 

The value for 1919 may be roughly estimated from the retail 
prices of coal published by the United States Bureau of Labor 
Statistics for Scranton, Pennsylvania. These values on January 
of each year were as follows: 

Retail Price 

in January in Value of Product 
Scranton, Penna. at Mine Mouth 


1916 . $4.37 $2,306 

1917 . 5.25 2.847 

1918 . 6.11 3.404 

1919 . 7.47 . 


From 1916 to 1917 the retail price increased 20 per cent., while 
the “value per ton” increased 24 per cent. From 1917 to 1918 
the retail price increased 16 per cent, while the “value per ton” 
increased 20 per cent. Thus in the light of these years it seems 
conservative to assume that from 1918 to 1919 the value per ton 
increased at the same rate as the increase in retail price, namely 
23 per cent. At this rate, the 1919 value per ton would be about 
$4.20, and the total value of the product would be about $360,- 
000,000, showing a greater increase than had taken place there¬ 
tofore in spite of the decreased production. 







11 


ANTHRACITE COAL MINING 

Production and Value of Product 















































































































































































12 



DATA FOR CHART A-l 



Anthracite 
Coal Production, 

Value of Product, 

Value of Product, 


Short Tons, 

Dollars, 

Per Ton, 


000 omitted 

000 omitted 

Dollars 

1909. 

. 81,070 

149,181 

1.840 

1910. 

. 84,485 

160,275 

1.897 

1911. 

. 90,464 

175,189 

1.934 

1912. 

. 84,361 

177,622 

2.093 

1913. 

. 91,524 

195,181 

2.131 

1914. 

. 90,821 

188,181 

2.072 

1915. 

. 88,995 

184,653 

2.075 

1916. 

. 87,578 

202,009 

2.306 

1917. 

. 99,611 

283,650 

2.847 

1918. 

. 98,826 

336,480 

3.404 

1919. 

. 86,200 



Source: Reports of the U. S. Geological Survey, Department of the 
Interior. 1919 production is estimated by Geological Survey from shipments 
for January-November, as reported by Anthracite Bureau of Information, 
and December, by United States Railroad Administration. 


The next chart, A-2, shows the numbers of employees and the 
days worked each year since 1909. It is very noticeable that 
from 1915 to 1918 the number of employees fell off to a large 
extent, while at the same time the days worked materially in¬ 
creased. This would seem to indicate that with a return to what 
might be called normal conditions, when the number of employees 
has once more risen to normal, the number of days worked per 
year will return to the former low level. It is, therefore, not 
safe to assume that the future conditions will warrant the oper¬ 
ators keeping the mines open as many days as they did in 1918 
and in 1917. Apart from the return of the normal working 
force, the fact that a large amount of bituminous coal is once 
more competing for the domestic supply of the West and is also 
being used for apartment houses in the East will tend also to 
reduce the number of days worked below the 1918 high point. 















13 


ANTHRACITE COAL MINING 

Number of Employees and Average Days Worked 





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Chart A-2 















































































































































































































































































































14 


DATA FOR CHARTS A-2 AND A-5 


1909. 

Average 

Number of 

Days Worked 

Number of 
Employees 

173,504 

169,497 

Number of 
Employee Days 

1910. 

. 229 

38,800,000 

1911. 

. 246 

172,585 

42,300,000 

1912. 

. 231 

174,030 

40,200,000 

1913. 

. 257 

175,745 

45,100,000 

1914. 

. 245 

179,679 

44,000,000 

1915. 

. 230 

176,532 

40,600,000 

1916. 

. 253 

159,869 

40,400,000 

1917. 

. 285 

154,174 

44,000,000 

1918. 

. 293 

147,121 

43,100,000 

1919. 


152,296 

38,400,000 


Source: Reports of the U. S. Geological Survey, Department of the 
Interior. Number of employees in 1909 from Census Report 1919 figure is 
estimated by the Geological Survey. The number of employee days is the 
product of numbers of employees and of days worked. Number of employees 
in 1919 estimated by Anthracite Bureau of Information. 


The next chart, A-3, shows the average tons of anthracite pro¬ 
duced per employee per day and per year since 1907. The tons 
mined per day fell from the high point of 2.39 in 1908 to the low 
point of 2.02 in 1913. Since 1913 they increased up to 2.29 in 
1918 and then fell off slightly to 2.25 in 1919. These figures do 
not represent the tons mined per miner, or even per productive 
employee, as they are influenced by fluctuations in the numbers 
of unproductive employees. 

The tons mined per year did not vary much from 1907 to 1915, 
the extreme variation being less than 10 per cent. Since 1915 
they rose rapidly up to 1918, the rise amounting to about 30 
per cent. 

The scale of this chart for tons produced per employee per day 
is a very “open” one, that is the variations are magnified a great 
deal. It will be noted that since 1910 the actual maximum 
variation in this figure has been only 6 per cent, or 7 per cent, 
each side of the average of 2.16 tons. 














15 


ANTHRACITE COAL MINING 

Average Tonnage Per Employee 






































































































































































16 


DATA FOR CHART A-3 

Aver. Tonnage Aver. Tonnage 
Per Man Per Man 

Per Day, Per Year, 

Short Tons Short Tons 

1907 . 2.33 512 

1908 . 2.39 476 

1909 . 

1910 . 2.17 498 

1911 . 2.13 524 

1912 . 2.10 485 

1913 . 2.02 520 

1914 . 2.06 505 

1915 . 2.19 504 

1916 . 2.16 548 

1917 . 2.27 646 

1918 . 2.29 672 

1919 . 2.25 566 


The next chart, A-4, shows the number of employees and the 
production since 1909. It is noticeable that the greatest increase 
in production (namely that from 1916 to 1917) came when there 
was a great decrease in the number of employees. This, of 
course, was possible only by a large increase in days worked. 















17 


ANTHRACITE COAL MINING 

Production and Number of Employees 


















































































































































































































































































































































































18 


DATA FOR CHART A-4 


Anthracite 

Coal Production, Number of 

Short Tons, Employees 

000 omitted 


1909 . 81,070 173,504 

1910 . 84,485 169,497 

1911 . 90,464 172,585 

1912 . 84,361 174,030 

1913 . 91,524 175,745 

1914 . 90,821 179,679 

1915 . 88,995 176,552 

1916 . 87,578 159,869 

1917 . 99,611 154,174 

1918 . 98,826 147,121 

1919 . 86,200 152,296 


Source: Reports of the U. S. Geological Survey, Department of the 
Interior. Number of employees in 1909 from Census Report. 1919 pro¬ 
duction is estimated by Geological Survey. Number of employees in 1919 
estimated by Anthracite Bureau of Information. 


The next chart, A-5, shows the production per year since 1909 
and also the number of “employee-days”—that is the average 
number of employees each year multiplied by the average number 
of days worked that year. The two curves follow each other very 
closely. In other words, when the number of employee-days 
increased, the production increased and when it decreased the 
production decreased. 

Summing up the foregoing charts and tables, it is evident that 
the number of days worked each year is dependent not only on 
the production that is desired, but also upon the number of em¬ 
ployees. Thus the rise in days worked from 1917 to 1918 was not 
caused by an increase in production, the actual tonnage falling 
off a million tons, but was caused by a great decrease in the 
number of employees. 

The comparatively high earnings of 1918, then, cannot be 
looked upon as in any sense normal or as likely to continue unless 
the wage rates are increased. The earning power, on the con¬ 
trary, will be cut down (1) by a return to the normal pre-war 
number of employees and (2) by the return of normal production. 














19 


ANTHRACITE COAL MINING 

Production and Employee Days 



Chart A^B 































































































































































































































































B.—PRODUCTION AND WAGE RATES 

The following three charts, numbered respectively B-l, B-2 
and B-3, compare the “value of the product” of the anthracite 
mines, both as to total value and as to value per ton, with the 
wage rate of the anthracite contract miner. 

The significant chart of the three is B-3, which compares the 
increase of the value per ton with the increase in the contract 
miner wage rate. The wage rate of the contract miner is either 
on a direct tonnage basis or else is based on a car containing a 
supposedly fixed number of tons, so a comparison of the rate 
with the value per ton is a measure of his economic efficiency. 
The comparison shows whether the contract miner is producing 
more or less value in proportion to his wage, whether, in other 
words, he is taking for his own use a greater or a less share of 
the value of his product. 

The comparison shows that the contract miner is producing 
more in proportion to his wage all the time. It shows that he is 
taking less of his product, measured in terms of value, every year. 

Since 1912 the wage rate of the contract miner per ton mined 
has increased 49.8 per cent. His product per ton mined has 
increased in value 100.7 per cent. (These are not retail prices, 
but the value of the coal at the mine mouth as given by the 
operators to the Geological Survey.) 

Translating these percentages into dollars and cents, and 
assuming rates in round figures for purposes of illustration, 
a miner who in 1912 mined coal at the rate of 40 cents per ton, 
produced for that 40 cents coal at a value of $2,093. In 1919 he 
would have received 60 cents for his product, but that product 
would then have a value of $4.20. In other words, in 1912 his 
product was worth 5% times the wage given to the miner for 
producing it, while in 1919 it was worth 7 times the miner’s wage. 

It does not necessarily follow that the wage of the contract 
miner should bear a constant relationship to the value of his 
product, but the chart shows that from 1912 up to 1917 the two 
kept very closely together—that is to say, up to 1917 the wage 
rates of the contract miner were increased in conformity with 
increases in the value of the product. 

The next chart, B-l, shows the yearly value of the product per 
employee and the rise in value per employee in per cent, since 
1909. 


20 


21 


The value of the product per employee in 1909 was $859, while 
in 1918 it was $2,360. This is an increase of $1,501 per employee, 
amounting to 175 per cent. 


ANTHRACITE COAL MINING 

Value of Product Per Employee 











































































































































































































22 


DATA FOR CHART B-l 



Number of 

Value of 

Value of Product 



Employees 

Product 

per Employee Per cer 



000 omitted. 

Dollars. 


1909 . 

. 173,504 

149,181 

859 

100 

1910 . 

. 169,497 

160,275 

946 

110 

1911 . 

. 172,585 

175,189 

1015 

118 

1912 . 

. 174,030 

177,622 

1021 

119 

1913 . 

.. 175,745 

195,181 

1111 

129 

1914 . 

.. 179,679 

188,181 

1047 

122 

1915 . 

. 176,552 

184,653 

1046 

122 

1916 . 

. 159,869 

202,009 

1263 

147 

1917 . 

. 154,174 

283,650 

1839 

214 

1918 . 

. 147,121 

336,480 

2292 

267 

1919 . 

. 152,296 

360,000* 

2360* 

275* 


* Estimated. 


Source: Reports of U. S. Geological Survey. The 1919 value is esti¬ 
mated from the retail price at Scranton, and estimate shown to be con¬ 
servative in the first section of this exhibit. 


The next chart, B-2, shows the total value of the product com¬ 
pared with the wage rate of contract miners. Both are expressed 
as per cents of their respective value in 1912. 

The value of the product did not vary much before 1917, but 
in 1917 and thereafter it rose very much faster than the rise in 
the wage rate. By 1919 the wage rate had risen 49.8 per cent, 
over 1912 while the value of the product had risen 102.7 per cent. 

The shaded area on the chart represents the amount by which 
the rate of contract miners has failed to keep pace with the total 
value of the product. 

If the wage rate had kept pace with the value of the product, 
it would in 1919 have been slightly over double its 1912 value. 

To raise the present contract miner’s wage rates to the same 
proportionate relationship to the total value of the product they 
were in 1912 would necessitate a present increase amounting to 
35.3 per cent. 














23 


ANTHRACITE COAL MINING 

Increase in Value of Product in Per Cent, and in Wage Rate in Per Cent, of 

Contract Miners 










































































































































































































































































































































































































































24 


DATA FOR CHART B-2 



Value of 

Value of 

Wage Rate 


Product 

Product in 

of Contract 


000 omitted. 

Per Cent. 

Miners in 

Per Cent. 

1912. 

177,622 

100.0 

100.0 

1913. 

195,181 

109.9 

100.0 

1914. 

188,181 

105.9 

100.0 

1915. 

184,653 

103.9 

100.0 

1916. 

202,009 

113.6 

107.0 (after April) 

1917. 

283,650 

159.7 

117.7 (after April) 
133.75 (after Nov.) 

1918. 

336,480 

189.4 

149.8 (after Nov.) 

1919. 

360,000 

202.7 

149.8 


Source: Value of product from reports of U. S. Geological Survey, the 
1919 value being estimated from the production, by assuming same per¬ 
centage increase in “value” per ton F. O. B. mine as took place in retail 
prices in Scranton. Relative wage rates of contract miners are from the 
agreements. 


The next chart, B-3, shows the value of the product per ton 
compared with the rate of contract miner’s. Both are expressed 
as per cents of their respective values in 1912. 

Before 1917 the value per ton and the contract rate maintained 
a very close relationship. In 1917, however, the value began to 
increase more than the increase in contract rates, and this is more 
apparent in 1918 and still more so in 1919. By 1919 the wage 
rate had risen 49.8 per cent, over 1912 while the value per ton 
had risen 100.7 per cent. 

The shaded area in the chart represents the amount by which 
the rate of contract miners has failed to keep pace with the value 
of anthracite coal per ton. 

To raise the present wage rates of contract miners to the same 
proportionate relationship to the value per ton they possessed in 
1912 would necessitate a present increase amounting to 34.0 per 
cent. 










ANTHRACITE COAL MINING 

Increase in Value of Product Per Ton (in Per Cent.) and in Wage Rate 
(in Per Cent.) of Contract Miners 


































































































































































































































































































































































































26 


DATA FOR CHART B-3 

Wage Rate 

Value of Product per Ton of Contract 

Miners in 

Dollars Per Cent. Per Cent. 

1912 . 2.093 100.0 100.0 

1913 . 2.131 101.3 100.0 

1914 . 2.072 99.0 100.0 

1915 . 2.075 99.1 100.0 

1916 . 2.306 109.7 107.0 (after April) 

1917 . 2.847 136.0 117.7 (after April) 

133.75 (after Nov.) 

1918 . 3.404 162.6 149.8 (after Nov.) 

1919 . 4.20 200.7 149.8 

Source: Relative wage rates of contract miners are from the agree¬ 
ments. Value of product per ton are from reports of U. S. Geological 
Survey, the 1919 value being estimated by assuming the same percentage 
increase in “value” per ton F. O. B. mine as took place in retail prices in 
Scranton. 











C.—WAGE RATES AND COSTS AND PRICES 


The following pages of this exhibit present the results of the 
study of the costs of production of anthracite coal made for the 
years 1917 and 1918 (some of the figures running back to 1913) 
by the Federal Trade Commission. These costs are compared 
with wholesale and retail prices, taken principally from this 
report of the Federal Trade Commission, from publications of the 
United States Geological Survey and from the Monthly Reviews 
of the United States Bureau of Labor Statistics supplemented by 
data secured from various dealers in the principal cities along 
the North Atlantic Coast. 

The table below sets forth the increases in dollars per gross 
ton between the average of the year 1914 and (1) the average of 
the year 1918 and (2) December, 1918, of labor costs, total f. o. b. 
mine costs, sales realization, wholesale price f. o. b. mine, and 
retail prices at Scranton, New York and Boston. For the mine 
costs, the costs of mining the combined product are given because 
the employees engaged in all kinds of mining are concerned in 
this arbitration, the men working on washery production being 
members of the Mine Workers Union and sometimes working on 
washery and sometimes on fresh mining operations. 

Increase in Increase in 
dollars per dollars per 

gross ton. gross ton. 

Average of Average of 
1914 to average 1914 to 

of 1918. December, 1918 


Labor Costs .... $0.85 $1.41 

Total F. O. B. Mine Cost. 1.31 2.05 

Sales Realization. 1.43 2.22 

Wholesale Price F. O. B. Mine. 1.69 2.69 

Retail Price—Scranton. ... 3.332* 

Retail Price—New York . ... 4.368* 

Retail Price—Boston . ... 4.48* 


Thus it is evident that the increase in dollars per ton of labor 
costs at the mine is materially less than the increase in the other 
costs and prices in the table. For instance, the consumer in New 
York or Boston was paying for his coal in January, 1919, as com¬ 
pared with what he paid in January, 1914, an increase that was 

* Increase from January, 1914, to January, 1919. 

27 











30 


the Federal Trade Commission, many of the larger mining cor¬ 
porations sell their product through sales companies, which have 
substantially the same ownership as have the mining corpora¬ 
tions. (See report of Federal Trade Commission on Anthracite, 
dated June 30, 1919, pages 31-32.) Thus these large companies 
can afford to mine the coal at approximately cost, or with a very 
small profit, deriving the main share of their profits from their 
wholesale and retail business. Apart from that, as the railroad 
companies either own the coal companies direct or through stock 
ownership, the profit derived from the freight charges is sufficient 
to justify these railroads in making only a small profit in the 
actual mining operations. Nothing in the above should be taken 
as constituting charges of improper dealings on the part of the 
mine owners or of the railroads. The point to bear in mind is 
that in many cases there is one ownership of the railroads, the 
mining companies and the sales companies and the total profit to 
that common owner resulting from the mining industry should be 
considered and not simply the profit from one branch which 
admittedly is on a conservative basis. 

A study of the costs of production of anthracite coal was made 
for 1917 and 1918 (some of the figures running back to 1913) by 
the Federal Trade Commission. Its report is dated June 30, 1919. 
For the years 1917 and 1918 the data cover the output of opera¬ 
tors who produced about 78,000,000 gross tons annually, com¬ 
prising about 99 per cent, of the total commercial output, and for 
the years 1913-1918 covers the operations in considerable detail 
of seven operators who produced about 42,000,000 gross tons 
annually, or over 50 per cent, of the total output. 

From 90 to 95 per cent, of the total tonnage of the commercial 
production comes directly from the mines, and of the remaining 
5 to 10 per cent, the greater part is reclaimed from culm banks 
which were formed in years past through the dumping of coal 
which was then unmerchantable, but which has since acquired 
sufficient market value to be worth reclaiming. The product 
obtained directly from the mines is usually known as “fresh 
mined,” that from culm banks is known as “culm-bank washery,” 
or simply “washery.” 

About 99 per cent, of the total production of the larger sizes 
of coal (the “prepared sizes,” which enter principally into 
domestic use) is obtained from the fresh-mined coal. About 75 
per cent, of fresh-mined coal consists of prepared or domestic 
sizes and about 25 per cent, of small or “steam” sizes, which are 


31 


used in industries. Most of the coal recovered from culm banks 
consists of these steam sizes. 

The Federal Trade Commission points out that: 

The anthracite industry for many years has included two groups 
of operators. One group is composed of a relatively few operators 
producing from 70 to 80 per cent, of the total output; affiliated to 
a considerable extent with the principal railroads which serve the 
anthracite field; owning, as a class, vast reserves of coal land; 
mining part of their lands, leasing part to other operators who pay 
them royalty, and holding the balance as a reserve for the future; 
mining a relatively small part of their coal, on a royalty basis, 
from lands not owned by them; operating usually on a large scale; 
and controlling, in large measure, the marketing of their coal to 
the retailer, and sometimes even to the ultimate consumer. The 
other group is composed of about 10 times as many operators, pro¬ 
ducing from 20 to 30 per cent, of the total output; owning, as a 
class, but little coal land and mining most of their product on the 
basis of royalty payments; operating usually on a small scale; and 
selling most of their products to wholesalers or jobbers. The first 
group has for years dominated the market, selling practically all of 
their products at prices (the so-called “circular” prices) which 
were quite uniform for the products of the different operators, grade 
of coal, and sizes considered, and which were rarely changed (ex¬ 
cept for the spring discounts) within a given coal year. The sec¬ 
ond group, often, in times of slack demand, has followed the policy 
of seeking business by selling their product below the “circular” 
prices charged by the first group, while in times of great demand 
it has obtained, by charging “premiums,” prices materially above 
“circular.” 

Most of the information following concerning costs is taken or 
calculated from this coal report of the Federal Trade Commission. 


The following chart, C-l, shows the average costs and sales 
realizations for seven operators, producing annually about 
39,000,000 tons of fresh-mined product and 3,000,000 tons of 
culm-bank washery product for 16 significant periods from 1914 
to 1918, inclusive. The total f. o. b. mine cost is shown, with its 
three major subdivisions of labor cost, supplies and general ex¬ 
pense and also the sales realization received by the operators. 
The shaded area between the total cost and the sales realization 
is the margin which is available for sales expense (if any), in¬ 
terest, Federal taxes, surplus and dividends. 

The labor cost increased from $1.71 per gross ton in January, 
1914, to $3.31 in December, 1918, an increase of $1.60 or 93.6 per 
cent. In the same time the margin increased from $0.22 to $0.39, 
an increase of $0.17, or 77.3 per cent. Thus it should be noted 


32 


that the increase in labor costs was certainly not at the expense 
of the operators. Furthermore, the average margin from May to 
November, 1917, was $0.71, which is an increase over January, 
1914, amounting to 223 per cent. 

The average figures for the entire year, instead of for the 
periods shown in the chart, are as follows: 


Costs Per Gross Ton Total 

Year General F.O.B. 

Labor Supplies Expenses Mine Cost 


1913 . 1.59 .35 .35 

1914 . 1.59 .33 .36 

1915 .1.60 .31 .38 

1916 . 1.72 .36 .44 

1917 . 1.94 .50 .47 

1918 . 2.62 .67 .53 


Sales Margin (Sales 
Realiza- Realization 
tion Over Total 
F.O.B. Mine Cost) 

2.29 2.66 .37 

2.28 2.67 .39 

2.29 2.66 .37 

2.52 2.97 .45 

2.91 3.53 .62 

3.82 4.21 .39 


The table below shows the rise in labor costs per ton, the aver¬ 
age cost per ton for the year 1914 (namely $1.59) being taken as 
the base or as equal to 100.0: 


Period Relative 

January-March, 1914. 108. 

April-August, 1914. 99. 

September-December, 1914. 98. 

January-March, 1915. 108. 

April-August,1915. 99. 

September-December, 1915. 99. 

January-March, 1916. 102. 

April-August, 1916. 111. 

September-December, 1916. 108. 

J anuary-April, 1917. 111. 

May-August, 1917. 120. 

September-November, 1917. 124. 

December, 1917-March, 1918. 162. 

April-August, 1918. 154. 

September-October, 1918.✓. 161. 

November-December, 1918. 208. 


Year 

1913 

1914 

1915 

1916 

1917 

1918 


100 . 

100 . 

101 . 

108. 

122 . 

165. 


It will thus be noted that the labor costs per ton increased 
faster than the rates of the contract miners. These contract 
rates, for comparison, are given below: 






























33 


Rates of Contract Miners 
Per Cent 


1912 (After April). 100. 

1913 . 100. 

1914 . 100. 

1915 . 100. 

1916 (After April). 107. 

1917 (After April). 117.7 

1917 (After November). 133.75 

1918 (After November). 149.8 

1919 . 149.8 


The labor costs from 1913 to and including 1917 followed the 
contract rates closely, but in 1918 the costs rose more than did 
the contract rates. This is because the lower paid employees in 
the mines and outside received the flat increase, which amounted 
in most cases to a greater per cent, increase than was received by 
the contract miners. 











34 



Chart C-4 









































































































































































































































































































































































































































































































































































































35 


DATA FOR CHART C-l 
Fresh Mined Product 

Costs Per Gross Ton Margin 

-- Sales (Sales 






General Total fob Realiza- 

Over 



Labor Supplies Expenses 

Mine 

Cost 

2.48 

tion 

Cost) 

January-March. 

.1914 

1.71 

.38 

.39 

2.70 

.22 

April-August. 

.1914 

1.57 

.30 

.36 

2.23 

2.60 

.37 

September-December. . 

.1914 

1.56 

.31 

.36 

2.23 

2.73 

.50 

January-March. 

.1915 

1.71 

.36 

.42 

2.49 

2.68 

.19 

April-August. 

.1915 

1.58 

.29 

.37 

2.24 

2.59 

.35 

September-December. . 

.1915 

1.57 

.30 

.36 

2.23 

2.73 

.50 

January-March. 

.1916 

1.63 

.33 

.42 

2.38 

2.79 

.41 

April-August. 

.1916 

1.77 

.36 

.44 

2.57 

2.95 

.38 

September-December. . 

.1916 

1.72 

.40 

.45 

2.57 

3.14 

.57 

January-April. 

.1917 

1.76 

.44 

.44 

2.64 

3.18 

.54 

May-August. 

.1917 

1.91 

.48 

.46 

2.85 

3.57 

.72 

September-November.. 

.1917 

1.97 

.58 

.49 

3.04 

3.74 

.70 

December, 1917-March 
April-August. 

.1918 

2.58 

.62 

.53 

3.73 

4.12 

.39 

.1918 

2.45 

.65 

.50 

3.60 

3.99 

.39 

September-October. .. . 

.1918 

2.55 

.72 

.55 

3.82 

4.17 

.35 

November-December. . 

.1918 

3.31 

.80 

.61 

4.72 

5.11 

.39 


Source : Coal report of Federal Trade Commission. Data on fresh mined coal 
of seven operators producing about 42,000,000 gross tons annually, of which about 
39,000,000 gross tons was fresh mined product. 


The next chart, C-1%, shows for the culm-washery product the 
same data that Chart C-l shows for the fresh mined product. The 
importance of the culm-washery during the past years is shown 
by the table below, which gives the output of the seven operators, 
mining about one-half of the total anthracite output. 


Percent that 

Fresh Mined Culm-Washery Culm-Washery 


Year Product Product bears to total 

Gross Tons Gross Tons product 

1913 . 39,542,712 916,828 2.3 

1914 . 38,784,338 1,053,506 2.6 

1915 . 37,532,011 1,590,572 4.1 

1916 . 37,290.058 2,141,214 5.4 

1917 . 42,482,212 3,423,759 7.5 

1918 . 41,136,232 5,062,496 10.9 


As the culm-washery product is mostly steam sizes, however, it 
is not probable that the operators will be able to sell as much in 
the future as they did during 1918 owing to the competition of 
the bituminous field. The sales realizations from anthracite 
steam sizes and from bituminous during 1917 and 1918 were as 


follows: 


Anthracite 
Steam Sizes 

Period (Excluding Pea) 

Per Net Ton 

January-April.1917 S1.22 

May-August.1917 1.79 

September-N ovember... 1917 1.88 

Dec., 1917-March.1918 2.15 

April-August.1918 2.29 

S^ptember-October.1918 2.34 

ovember-December... 1918 2.44 


Bituminous 


Central 
Field of Penn. 
Per Net Ton 
$2.36 
3.10 
3.09 
3.26 
3.17 
3.02 
3.04 


Southwest 
Field of Penn. 
Per Net Ton 
$2.12 
2.96 
2.81 
2.74 

2.43 

2.44 
2.40 
























36 



















































































































































































































































































































































37 


Thus the anthracite operators were able to sell their steam size 
product for more than the bituminous operators in the south¬ 
western field of Pennsylvania during November-December, 1918, 
but in general their sales realizations were under the sales reali¬ 
zations of bituminous coal from both the Pennsylvania fields. 

The chart shows that from January-March, 1914, to November- 
December, 1918, the labor costs of the culm-washery product in¬ 
creased from 27 cents to 88 cents per gross ton, an increase of 61 
cents per ton, amounting to 226 per cent. In the same period the 
margin of the operators increased from 52 cents to $1.77 per 
gross ton, an increase of $1.25 per ton amounting to 240 per cent. 
The average margin of the operators for these sizes in each year 
since 1913 has been more than the total mine cost. 

DATA FOR CHART C-l V 2 
Culm-Washery Product 

Costs Per Gross Ton Sales Margin 

-^-Realiza- (Sales 

General Total fob tion Per Realiza- 




Labor 

Supplies Expenses 

Mine 

Gross 

Mine. 






Cost 

Ton 

Cost) 

January-March. 

.1914 

.27 

.08 

.15 

.50 

1.02 

.52 

April-August. 

.1914 

.23 

.09 

.16 

.48 

1.11 

.63 

September-December. . 

.1914 

.34 

.09 

.23 

.66 

1.42 

.76 

January-March. 

.1915 

.31 

.12 

.12 

.55 

.94 

.39 

April-August. 

.1915 

.25 

.07 

.17 

.49 

1.15 

.66 

September-December. . 

.1915 

.23 

.06 

.17 

.46 

1.08 

.62 

January-March. 

.1916 

.29 

.13 

.11 

.53 

1.14 

.61 

April-August. 

.1916 

.28 

.11 

.12 

.51 

1.33 

.82 

September-December. . 

.1916 

.33 

.19 

.13 

.65 

1.30 

.65 

January-April. 

.1917 

.34 

.17 

.23 

.74 

1.55 

.81 

May-August. 

.1917 

.42 

.18 

.22 

.82 

2.09 

1.27 

September-November.. 

.1917 

.46 

.26 

.26 

.98 

2.34 

1.36 

December, 1917-March 
April-August. 

.1918 

.85 

.34 

.23 

1.42 

2.72 

1.30 

.1918 

.63 

.25 

.23 

1.11 

2.82 

1.71 

September-October.... 

.1918 

.62 

.30 

.27 

1.19 

2.96 

1.77 

November-December. . 

.1918 

.88 

.33 

.28 

1.49 

3.26 

1.77 

Year—1913. 


.25 

.08 

.13 

.46 

.99 

.63 

1914. 


.26 

.09 

.17 

.52 

1.15 

.63 

1915. 


.25 

.08 

.16 

.49 

1.08 

.59 

1916. 


.30 

.15 

.12 

.57 

1.28 

.71 

1917. 


.44 

.22 

.24 

.90 

2.07 

1.17 

1918. 


.71 

.29 

.25 

1.25 

2.91 

1.66 


The next chart, C-la, shows the mine costs and sales realiza¬ 
tions for the same operators as shown on Chart C-l, for the com¬ 
bined fresh mined and culm-washery product, the average figures 
for each year's operations being shown. From 1913 to 1918 the 
labor cost per ton increased from $1.56 to $2.41, an increase of 
$0.85 amounting to 54% per cent. In the same time the margin 
increased from $0.37 to $0.52, an increase of $0.15 or 40.6 per 
cent. 



















38 


Although the margin did not increase as fast as did the labor 
cost, the fact that the margin actually increased shows that the 
advances made in the wage rates did not come out of the profits 
of the operators, and that the operators increased the price of 
coal sufficiently to meet the increased labor costs, the increased 
costs of supplies and general administration and still have 
remaining an increased margin. 


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Chart C-lfl 


























































































































































































































































39 


DATA FOR CHART C-la 
Combined Product 


Margin 

Costs Per Gross Ton (Sales 

- Realiza- 

General Total fob Sales tion on 
Labor Supplies Expenses Mine Realiza- Total 


Cost tion Cost) 

1913 . 1.56 .35 .39 2.25 2.62 .37 

1914 . 1.56 .32 .35 2.23 2.63 .49 

1915 . 1.55 .30 .37 2.22 2.60 .38 

1916 . 1.65 .35 .42 2.42 2.88 .46 

1917 . 1.83 .48 .45 2.76 3.42 .66 

1918 . 2.41 .63 .50 3.54 4.06 .52 


DISTRIBUTION OF COST AND SALES REALIZATION 

Labor received in 1918 a slightly smaller proportion of the 
total mine cost and of the sales realization than it did in 1913. 
This is shown by the two following charts, C-2 and C-3. Chart 
C-2 shows the distribution among the three major subdivisions 
of labor cost, supplies cost and general expense of each dollar of 
total mine cost. In 1913 labor received 69 cents out of each dollar 
of total mine cost. In 1918 it received only 68 cents. This shows 
that the other expenses of operating the mines increased more 
than labor costs increased. 

Chart C-3 shows that in 1913 labor cost amounted to 60 cents 
out of each dollar of sales realization, while in 1918 it amounted 
to only 59 cents. The margin amounted in 1913 to 14 cents out 
of each dollar of sales realization. It increased to a maximum of 
19 cents in 1917 and then fell to 13 cents in 1918. 









40 



Chart C—2 


DATA FOR CHART C-2 

Distribution Between Labor, Supplies and General Expense of Each Dollar of Total 
F. 0. B. Mine Cost—(Combined Production) 


1913. 

Labor 

Supplies 

General 

Expense 


16 

15 

1914. 


14 

16 

1915. 


13 

17 

1916. 


15 

17 

1917. 


18 

16 

1918. 


18 

14 






































































































































































































































































































































41 



^ T ry-TVi-w r 




tstit g 




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|p®||p||| 




DATA FOR CHART C-5 

Distribution of Total Sales Realization of Various Costs and of Margin Over Cost 

(Combined Production) 


1913 

1914. 

1915. 

1916. 

1917. 

1918. 


Labor 

Supplies 

General 

Expense 

TotalFOB 
Mine Cost 

Margin 
(Sales Over 
Cost) 

14 

60 

13 

13 

86 

60 

12 

13 

85 

15 

60 

11 

14 

85 

15 

57 

12 

15 

84 

16 

54 

14 

13 

81 

19 

59 

16 

12 

87 

13 

report of Federal Trade Commission. 









































































































































































































































42 


The following chart, C-4, shows the labor cost per gross ton at 
the mine and also the retail price per gross ton at New York 
City. The shaded area is the labor cost, and the distance from 
the bottom of the shaded area to the upper line is the retail 
price. This illustrates graphically the comparatively small part 
played by the mine labor cost in the determination of the total 
retail price to the consumer. In January, 1919, for instance, the 
labor cost amounted to only 24.7 per cent, of the retail price. 



Cb&rt 0-4 




















































































































































































































43 


DATA FOR CHART C-4 
Retail Prices Stove Coal New York City 


1914 1914 1916 1917 1918 1919 1920 

Per Net Ton Jan.. . 6.857 7.143 7.107 8.500 9.058 10.757 11.54 

July.. 6.850 6.907 7.393 . 9.300 10.800 12.65* 

Per Gross Ton Jan.. 7.6798 8.000 7.9598 9.520 10.1449 12.0478 12.9248 

July. 7.672 7.7358 8.2801 . 10.416 12.096 14.1680 


The next chart, C-5, shows the increases per gross ton since 
the average of the year 1914 in both the labor cost at the mine 
and in the retail price in New York City. The shaded area is 
the amount per ton by which the increase in retail price exceed 
the increase in labor cost. 

Since November, 1918, there have been no advances in the 
wage scales, and presumably the labor costs at the mines have 
kept fairly close to the mark of November-December, 1918. The 
retail price did not advance much up to the June price, but the 
price in January, 1920, was considerably higher. A large further 
advance has been made since January, 1920, to take care of the 
expected major increase that will be retroactive to April 1, 1920. 


*June 





44 




*cc* afeE 


in 11a' 






















































































































































































































































































































































































































































































































































































































































































































































































































































45 


DATA FOR CHART C-5 


Increase in retail price 




Increase in Labor 

of stove coal per gross 



Cost per gross ton 

ton in New York 



from average of 

City from aver¬ 



1914 

age of 1914 

To average of. 

. ...1915 

$0.01 decrease . 

(( U il 

.. . .1916 

0.09 


“ average of. 

....1917 

0.27 

. 

“ January-March. 

....1918 

0.89 


“ April-August. 

....1918 

0.69 


“ September-October. 

.1918 

0.74 


“ November-December. ... 

....1918 

1.41 


To January. 

....1915 


$0,325 

“ July. 

...1915 


0.060 

“ January. 

...1916 


0.284 

“ July. 

...1916 


0.605 

“ January. 

....1917 


1.845 

“ January. 

....1918 


2.520 

“ July. 

....1918 


2.741 

u January. 

....1919 


4.373 

“ July. 

....1919 


4.421 

“ Januarj^. 

.... 1920 


5.250 . 

M June. 

.. .1920 


6.493 


























































’ 














. 


























































































































. 





























































. 








































